Choosing a home loan checklist

If you thought choosing a property was difficult, just wait until you have to choose the home loan that will pay for it.

Here’s a checklist of features to look for before you choose a home loan:

Do I need Lenders Mortgage Insurance (LMI)?

How much of a deposit do I have?

What fees apply to the loan?

What is the interest rate on the loan?

What’s the best type of loan for me?

Does the loan have features important to me?

Do I need Lenders Mortgage Insurance (LMI)?

If you have less than a 20% deposit, you may need to pay for lenders mortgage insurance. Lenders Mortgage Insurance is a premium payable by you the borrower that protects the lender (financial institution) against potential losses if you are unable to repay your loan. Learn more about Lenders Mortgage Insurance.

How much of a deposit do I have?

Different lenders offer loans with different Loan to Value ratios (LVRs). The LVR is the percentage of the loan amount that you are able to borrow from the lender.

What is the interest rate on the loan?

Lenders will typically display a current/advertised interest rate and a comparison rate.

The advertised rate generally is just the interest rate, and it does not include the cost of any fees or charges.

What’s the best type of loan for me?

Another home loan feature to look for is the decision between fixed or variable. You will need to weigh up the pros and cons for your individual circumstances to get the low-down on the benefits of both types of loan. Plus check out our fixed vs floating article.

Remember some loans have the ability to split your loan so that a proportion of the loan amount is variable and the remaining portion is fixed.

Does the loan have features important to me?

While interest rate, fees, deposit and repayment amount are important things to consider when taking out a mortgage, you should also check out what features are on offer in a home loan that you might be considering. Some home loan features to look for include: